Pakistan will continue to levy 18% goods and services tax (GST) on contraceptives such as condoms after the International Monetary Fund rejected a proposal to cut rates mid-fiscal year, according to a report by The News.
The decision comes as the country remains under an International Monetary Fund (IMF) bailout programme with strict conditions on taxation and revenue mobilisation.
Officials said the Federal Board of Revenue (Federal Board of Revenue) had approached the International Monetary Fund (IMF) through email and subsequent virtual discussions, seeking Goods and Service Tax (GST) relief on condoms and other essential hygiene products. The Federal Board of Revenue (FBR) estimated the revenue impact of the proposed cut at PKR 400–600 million and conveyed that the move reflected the intent of the Shehbaz Sharif-led government.
However, the International Monetary Fund (IMF) declined the request, stating that tax concessions cannot be granted in the middle of a fiscal year, particularly when Pakistan is struggling to meet revised revenue targets. Similar proposals to reduce GST on sanitary pads and baby diapers were also turned down.
